The world’s richest man, Tesla CEO Elon Musk has previously dismissed “shady” tax loopholes but a Reuters investigation suggests his own company may have relied on them to save $US400 million ($558m), United States taxes.
The Reuters investigation reviewed thousands of pages of corporate filings, tracked Tesla’s subsidiaries across 14 countries, analysed financial flows and company structures, and interviewed more than 20 experts, including three US tax experts who indecently review the analysis.
A look at Tesla’s global financial filing found the electric vehicle giant shifted approximately $US18 billion offshore to low-tax countries like the Netherlands and Singapore.
According to Reuters the outcome meant Tesla avoided at least $US400 million, equivalent to approximately AUD $550 million in US taxes.
The strategy is called “profit shifting”, and is widely used by multinational companies.
It involves routing profits through lower-tax jurisdictions, rather than booking them where the revenue is generated.
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For instance, with Tesla’s case, overseas subsidiaries act as financial conduits, allowing profits tied to its technology and intellectual property to be recorded outside of the US.
One of those subsidiaries is a Singapore-based entity reportedly receiving around $18 billion in profits between 2023 and 2025, income that was not taxed locally.
Another Dutch-based entity is set up as a “partnership” with no employees and no requirements to pay local tax, filings show.
Tax experts told Reuters that the set up “almost certainly” exists to move profits into lower-tax environments, often by assigning valuable intellectual property, like patents to offshore entities.
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In 2025, Tesla reported a federal tax bill of $0 and has paid little to no US federal income tax despite generating billions in revenue over two decades.
Some of that is due to early losses and government-backed EV incentives. But analyst say offshore structuring has also played a significant role.
A year earlier, while campaigning in the lead-up to the 2024 US election, the billionaire said he does not support tax strategies such as this.
“I’m often pitched these loopholes. that sounds pretty shady,” Musk said at the time.
Tesla and CEO Elon Musk is set to face investors in its upcoming earnings call later this week, where Musk will face pressure on margins, pricing and global demand.
There’s no suggestion Tesla or Elon Musk have broken any laws. Profit shifting remains a legal, though criticised, practice used by multinational companies.
